United States District Court, E.D. Pennsylvania
RICHARD A. LLORET UNITED STATES MAGISTRATE JUDGE
Background of the Dispute
defendants, the Estate of Robert D. Mills, Jr., Robert D.
Mills, Jr., and Cathy Vaughn (“the Estate”), have
filed a motion to compel a deposition of the plaintiff's
claims adjustor, with attendant document production, and an
extension of the discovery deadline. Doc. No. 32. The
plaintiff, Liberty Mutual Fire Insurance Company
(“Liberty Mutual”) has opposed the motion. Doc.
No. 33. The Estate filed a reply to Liberty Mutual's
opposition. Doc. No. 35.
D. Mills, Jr., 17, died on October 29, 2012. Some of the
details of the accident that caused his death are disputed,
but the general outlines are clear enough. He and his friend,
Anthony Skorochod, were driving in an ATV on a public street
in the Township of Plainfield, Pennsylvania, when Robert hit
his head on a downed tree. The tree had been knocked down in
a storm. Robert did not have a helmet on. He died a few days
later from the blow to his head.
Estate filed a complaint against Anthony Skorochod, the
alleged driver of the ATV, and his mother, Karen Skorochod,
the alleged owner of the ATV, in the Court of Common Pleas in
Northampton County, Pennsylvania. Liberty Mutual, the
Skorochod's property insurer, then filed this declaratory
action in federal district court, seeking to establish that
it had no duty to defend or indemnify the Skorochods. Liberty
Mutual named the Skorochods as defendants, as well as the
Estate and Cathy Vaughn (Robert Mills' mother).
Estate's motion to compel discovery is ripe for
Mutual argues that the Estate is not entitled to the
additional discovery. Its argument centers on the limited
universe of facts relevant to this declaratory judgment
action under the law of Pennsylvania. Liberty Mutual contends
that under Pennsylvania law only the policy and the complaint
are admissible evidence on the issue of coverage. Doc. No.
33, at 4-5 (citing to Kvaerner Metals Div. of Kvaerner
U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888,
896 (Pa. 2006). Under Kvaerner the duty to defend
cannot be triggered by allegations outside the complaint.
Id. at 8. Liberty Mutual also points out that the
cases cited to by the defendants in support of their motion
involved claims of bad faith by an insurer. Id. at
4. Since there is no bad faith claim in this case, Liberty
Mutual argues, there is no basis for deposing the claims
adjustor or receiving copies of the claims files.
Id. Finally, Liberty Mutual notes that the discovery
defendants seek would “necessarily require disclosure
of information which is exempt from discovery including the
attorney client privilege, the work product privilege and
other protected areas . . .” Id. at 4.
anticipating the dispositive motion it intends to file,
Liberty Mutual argues that the accident is excluded from
coverage under the policy because it falls under the
exclusionary language of Sections II(1)(f). Doc. No. 33, at
2. Section II(1)(f) excludes losses arising out of the use of
“motor vehicles or all other motorized land conveyances
. . . owned or operated by . . . an
‘insured.'” Doc. No. 32-1 at 2 (page
reference is to ECF pagination) (Liberty Mutual Policy
exclusion section). The exclusionary language has an
exception for a “motorized land conveyance designed for
recreational use off public roads, not subject to motor
vehicle registration and. . . (b) Owned by an
“insured” and not on an “insured
location[.]” Doc. No. 32-1, at 3(ECF pagination).
Liberty Mutual contends that the ATV in this case was not
excepted from this general exclusion because it was on a
public street at the time of the accident, not on an
“insured location[.]” Doc. No. 32-1, at 3 (ECF
pagination); Doc. No. 33, at 2. Liberty Mutual mentions that
it intends to file a dispositive motion shortly. Doc. No. 33,
Estate's position, perhaps anticipating its opposition to
Liberty Mutual's promised motion, is that the exclusion
does not apply, because of an exception to the motor vehicle
exclusion for a “vehicle or conveyance not subject to
motor vehicle registration which is: (a) used to service an
“insured's” residence[.]” Doc. No.
32-1, at 3 (ECF pagination); Doc. No. 35, at 2-3. As for its
discovery motion, the Estate wants unspecified documents from
Liberty Mutual's claims file - presumably, it wants a
look at the entire file - and wants to depose the claims
adjustor. Doc. No. 32. The Estate argues that the
“claims file is a unique, contemporaneously prepared
history of the company's handling of the claim. .
.” Doc. No. 32, at 4.
Rule of Civil Procedure 26(b)(1) provides for discovery of
any non-privileged matter that is relevant to any party's
claim or defense and proportional to the needs of the case,
considering the importance of the issues at stake in the
action, the amount in controversy, the parties' relative
access to the relevant information, the parties'
resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit.
the Estate has not explained the relevance of the materials
it seeks. Indeed, the Estate has not clearly explained
exactly what materials it seeks, or expects to find. The
Estate's initial memorandum focused on the supposed need
to discover a “contemporaneously prepared history of
the company's handling of the claim.” Doc. No. 32,
at 2. In an opaque sentence, the Estate spoke of its
burden showing [sic] that the insurer lacked
[sic] and that fact [sic] objectively
reasonable basis in denying his claim, insurer [sic]
and that the insurer knew or acted in reckless disregard of
that fact [sic] discussing the insurer's view of
the claim and rationale for denying it. As a general matter,